Daily Archives: October 15, 2014

Toyota to recall 1.75 million vehicles globally

Japan’s Toyota Motor Corp said on Wednesday it would recall a total 1.67 million vehicles globally in a voluntary move to address three separate defects including a faulty brake master cylinder that could hinder the brake’s performance.

Toyota said in an email it was not aware of any crashes, injuries or deaths resulting from the defects. Some 1.05 million vehicles will be recalled in Japan and 615,000 overseas, covering Toyota models Crown Majesta, Crown, Noah, Voxy, Corolla Rumion and Auris, as well as more than a dozen Lexus models.

Car makers have faced heightened global scrutiny on how quickly they share information with regulators and the public since a massive recall crisis in 2009 battered Toyota’s reputation and sales. Most vehicle recalls are issued on a voluntary rather than mandatory basis.

Toyota recalled 6.39 million vehicles globally in April in its second-largest recall announcement ever.

Two months later, the company issued a recall of almost 2.3 million vehicles globally for faulty airbag inflators that have also plagued other car makers.

In the latest recall, about 802,000 Crown Majesta, Crown, Noah and Voxy models manufactured between June 2007 and June 2012 will be called back to replace a rubber seal ring in the brake master cylinder to prevent brake fluid from leaking.

If brake fluid has already leaked, the brake booster will be replaced.

A second recall of about 759,000 vehicles globally, including 423,000 in the United States, will fix faulty fuel delivery pipes that could, in the worst-case scenario, cause a fire through a fuel leak.

Some of these vehicles are also subject to the first recall.

Toyota will also recall in Japan 190,000 front-wheel drive Corolla Rumion and Auris models built between October 2006 and October 2014 that are not equipped with an idling feature to fix a defective fuel evaporative emission control unit.

Shares in Toyota closed 0.2% higher in Tokyo at 5,990 yen after the recalls were announced, while the exchange’s Topix index gained 0.8%.


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Twitter And French Bank Team Up For Money Transfers Via Tweets


PARIS/FRANKFURT: One of France’s largest banks is teaming up with social network Twitter this week to allow its customers to transfer money via tweets.

The move by Groupe BPCE, France’s second-largest bank by customers, coincides with Twitter’s own push into the world of online payments as the social network seeks new sources of revenue beyond advertising.

Twitter is racing other tech giants Apple and Facebook to get a foothold in new payment services for mobile phones or apps. They are collaborating and, in some cases, competing with banks and credit card issuers that have run the business for decades.

The bank said last month it was prepared to offer simple person-to-person money transfers via Twitter to French consumers, regardless of what bank they use, and without requiring the sender know the recipient’s banking details.

“(S-Money) offers Twitter users in France a new way to send each other money, irrespective of their bank and without having to enter the beneficiary’s bank details, with a simple tweet,” Nicolas Chatillon, chief executive of S-Money, BPCE’s mobile payments unit, said in the statement.

Payment by tweets will be managed via the bank’s S-Money service, which allows money transfers via text message and relies on the credit-card industry’s data security standards.

BPCE and Twitter declined to provide further details ahead of a news conference in Paris on Tuesday to unveil the service.

Last month, Twitter started trials of its own new service, dubbed “Twitter Buy,” to allow consumers to find and buy products on its social network.

The service embeds a “Twitter Buy” button inside tweets posted by more than two dozen stores, music artists and non-profits. Burberry, Home Depot, and musicians such as Pharrell and Megadeth are among the early vendors.

Twitter’s role to date has been to connect customers rather than processing payments or checking their identities.

“From the Twitter point of view, there is a limit to their appetite for getting involved in payments processing itself,” said Andrew Copeman, a payments analyst with financial services research firm AITE Group, who is based in Edinburgh, Scotland.

“At the moment, banks are probably viewing Twitter and other social media networks as marketing channels to reach a wider set of their customers and to extend the bank’s existing mobile banking initiatives,” he said.

Twitter’s success in developing additional services on its platform as Facebook has done will be key to its future profitability. Rakuten Bank in Japan offers a similar “Transfer by Facebook” service that lets users of its mobile banking app send money to anyone in their Facebook friends list.

Investors have been worried about Twitter’s slowing user growth, sending the shares down about 17% this year, while rival Facebook’s have climbed 35%.

Thomas Husson, a marketing strategy analyst with Forrester Research, said Twitter was likely to multiply efforts to explore new ways to generate revenue with banks and credit card firms.

“Twitter wants to more explicitly demonstrate the overall value of its network as an advertising platform,” he said.


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Xiaomi, Not Apple, Is Changing the Smartphone Industry

Determining which customer to target first is one of the most critical decisions in the entrepreneurial process. Customers that are relatively less risky and more predictable can make it easier for new to firms gain a market foothold. One such set of customers is the nascent middle class in emerging economies.

Why? First, as their financial situation improves they are anxious to buy new things. Not quite able to afford the top brands, they’re nevertheless willing to pay a little more for something they perceive might be close. Second, because they can’t yet afford the high-margin top brands, they’re not all that attractive to incumbents worried about generating enough cash to cover their high fixed and variable costs. So they exist in a sweet spot from an entrepreneur’s point of view: rich and numerous enough to fuel a start-up’s growth and also poor enough not to spur incumbents to respond.

Xiaomi, the four-year-old Chinese smartphone manufacturer, has found just such a sweet spot, and as a result is taking the smartphone industry by a storm. Pundits claim that Xiaomi is just a Chinese copycat of Apple, and not without some reason. Some point to Xiaomi’s product introductions, which are eerily just like Apple’s. Others point out the strong similarities between Xiaomi’s operating system (named MIUI) and Apple’s iOS. What’s more, Xiaomi’s products rank among the best in the industry in terms of performance. All these cues might lead us to believe that it is competing head to head with the leading smartphone manufacturers.

However, looking at the full extent of Xiaomi’s business model reveals just how different – and how disruptive – it is. For starters, unlike Apple, Xiaomi is not targeting premium customers; it’s mostly teens buying those high-quality phones, and hardly at a premium, since Xiaomi’s prices are at least 60% lower. A neat trick. How does Xiaomi pull that off?

To sell high-quality cell phones at so low a price, Xiaomi keeps each model on the market far longer than Apple does. On average, a new version of a phone is launched every 265 days in the industry -down from 345 days in 2009. But Xiaomi doesn’t renew its product for two years. Then, rather than charge high prices to cover the high cost of state-of-the-art components, Xiaomi prices the phone just a little higher than the total cost of all its components. As component costs drop over the two-year period by more than 90%, Xiaomi maintains its original price, and pockets the difference. So essentially its profit formula is the opposite of Apple’s, which collects its highest profits with the introduction of each model and needs to come up with new model after new model to keep those margins up.

When you consider how much easier it might be to profit from plummeting component prices than from continual new feature development (which sooner or later will likely overshoot the needs of most cell phone customers in any event), the disruptive potential of the model becomes clear.

One might worry that other low-end competitors could easily copy this clever model, and to forestall that, Xiaomi has devised a creative way to create some of the mystique Apple is so justly noted for. Essentially it markets its phones to its price-constrained but status-conscious teen base in much the same way that rock band promoters sell concert tickets. Through an online retailer called Flipkart, potential buyers preregister for a short sales window. They’re required to stay online for at least two hours before the sale starts, and then only the first 20,000 lucky buyers get the opportunity to purchase. Human nature being what it is, after this awful experience, buyers end up wanting the phone even more.

Xiaomi is close to meeting its target of selling 60 million phones in 2014 with a business model well suited to expansion into other developing economies. In a classical reaction to disruptive innovation, the largest smartphone manufacturers were at first not motivated to seriously challenge Xiaomi, since they could not be profitable at the price these customers are able to pay. Now that Xiaomi is becoming a significant competitor, the incumbents are still barely reacting, launching simplified versions of their mature flagship products, as Apple did with the iPhone 5c. But these are perceived as outdated, as newer models, like the iPhone 6, are introduced amid great fanfare in wealthier markets, and often end up being discontinued.

So far from being a copycat, Xiaomi presents a knotty disruptive challenge to the largest smartphone manufacturers. As it continues to expand in developing economies by marketing to the emerging middle class, it remains sheltered from the competition by its margins and the way it makes products profitable. Sooner rather than later, as it continues to propagate its new business model, this disruptive competitor is going to change how this industry works.

Harvard Business Review

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EU to ban fish caught by vessels flagged in Sri Lanka

Colombo: The European Union (EU) has decided to ban the import of fisheries products caught by vessels flagged in Sri Lanka from entering the EU market after three months time from now, the EU office said here in a statement Tuesday.

The European Commission had in November 2012 sent a warning to Sri Lanka saying, they were not complying with international rules on illegal fishing and their control systems were inadequate.

According to the European Commissioner for Maritime Affairs and Fisheries, Maria Damanaki, two years later, not much has changed and the same problems are still there and even getting worse, Xinhua reported.

Sri Lanka is now authorising huge vessels to fish in the Indian Ocean without marine GPS (VMS) and that this renders control totally impossible, she added.

Damanaki said Sri Lanka is the second biggest exporter of fresh and chilled swordfish and tuna to the EU and in those circumstances the EU cannot tolerate not to know whether the fish they import into the EU was caught sustainably or not. EU citizens have the right to know what lands on their plate.

“So today, the commission goes to the next level: we are formally identifying Sri Lanka in the fight against illegal fishing. Fisheries products caught by vessels flagged in Sri Lanka will not be able to enter the EU market after three months time from now.”

“The council will, by that time, have the possibility to confirm and extend the depth and scope of the trade measures,” she added.


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